The Crude Oil Market is a very lucrative market because of the fact that just about every nation in the world needs oil and its also a non-renewable resource making it scarce. Oil is a very profitable resource as well, and influential when it comes to the power of nations. Major players in this industry are those who were lucky enough to have been placed above large oil reserves. As of now many countries, including the United States can produce large amounts of oil, but yet countries like Saudi Arabia and countries belonging to OPEC have big influences as well. These are countries that cannot only produce the same if not more barrels of oil, but they also have huge reserves of oil under their land allowing them to have a say in market prices.
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Many economists are still arguing the pros and cons of the effect low prices has had on the economy. Many say that low prices are good, especially those looking at it from the perspective of a consumer. If you're a consumer you're delighted that you're able to spend less on gasoline for your car, save on heating your home, which in turn puts out more money for you to spend or save. So when prices are lower people tend to spend more on other things. Similar to this idea is the perspective of employers. Companies like UPS ,FEDEX ,MTA ,and JetBlue also benefit from cheaper prices of gasoline and diesel fuel and jet fuel. When a company can save on this crucial component of operations, then can reallocate that money to other things like hiring more workers or expanding their operations. The fact that the United States now produces a large amount of oil domestically allows the national deficit to decrease which the government will always be happy …show more content…
They want to be able to sell oil at the most profitable rate, but the with larger world influences lowering it so much many are forced to take the small profits or even go out of business. Other non-OPEC nations like Russia and Brazil have suffered economically due to the fact that they can’t compete with low prices. This doesn't affect us much, but what does is the fact that when prices are low nobody is worried about the future and finding other forms of energy once oil runs out. Many projects along the lines of hybrid cars, or more efficient homes are significantly under funded or even sometimes completely stopped due to the lack of interest or necessity of it at the moment. This is a great concern to many environmentalists who say that this problem needs to be resolved now due to the diminishing amount of oil every day and all the impact it has on the earth. It’s hard to say when prices will go back up, but economist and special agencies like the International Energy Agency say that prices will continue to drop for a bit longer due to oversupply, but will start to normalize after U.S production from fracking decreases. Now this is all in a laissez faire economy, but thats never true because many nations especially those in OPEC and the United States are continuously making new deals of trade that will have an impact of prices of oil
Many economists are still arguing the pros and cons of the effect low prices has had on the economy. Many say that low prices are good, especially those looking at it from the perspective of a consumer. If you're a consumer you're delighted that you're able to spend less on gasoline for your car, save on heating your home, which in turn puts out more money for you to spend or save. So when prices are lower people tend to spend more on other things. Similar to this idea is the perspective of employers. Companies like UPS ,FEDEX ,MTA ,and JetBlue also benefit from cheaper prices of gasoline and diesel fuel and jet fuel. When a company can save on this crucial component of operations, then can reallocate that money to other things like hiring more workers or expanding their operations. The fact that the United States now produces a large amount of oil domestically allows the national deficit to decrease which the government will always be happy …show more content…
They want to be able to sell oil at the most profitable rate, but the with larger world influences lowering it so much many are forced to take the small profits or even go out of business. Other non-OPEC nations like Russia and Brazil have suffered economically due to the fact that they can’t compete with low prices. This doesn't affect us much, but what does is the fact that when prices are low nobody is worried about the future and finding other forms of energy once oil runs out. Many projects along the lines of hybrid cars, or more efficient homes are significantly under funded or even sometimes completely stopped due to the lack of interest or necessity of it at the moment. This is a great concern to many environmentalists who say that this problem needs to be resolved now due to the diminishing amount of oil every day and all the impact it has on the earth. It’s hard to say when prices will go back up, but economist and special agencies like the International Energy Agency say that prices will continue to drop for a bit longer due to oversupply, but will start to normalize after U.S production from fracking decreases. Now this is all in a laissez faire economy, but thats never true because many nations especially those in OPEC and the United States are continuously making new deals of trade that will have an impact of prices of oil